It is a bit of a quandary. On the one hand, we benefit from and love the services given to us by the tech giants: Facebook, Google, and Apple have undeniably made our lives more connected and enriched, and leveraged this scale to give marketers innovative and effective advertising solutions. But on the other hand, their success breeds more success, creating behemoths that make it difficult for individual startups and publishers to compete against their economies of scale and network effects.
This is why I’m heartened by what I’m seeing with second-party cookie data co-operatives, and the potential they have to put publishers on a level playing field with the digital giants. Publishers create compelling content that attracts and engages their audiences. The quid pro quo for providing this content without requiring payment is that the publisher is able to advertise to those users in a way that ideally does not overly distract from the process of digesting said content.
Savvy publishers understand that the role content can play is not just one of attracting and engaging their audiences, but of helping segment their audiences based on their interest or intent. As their readers browse and read content, these actions register as data points, which have the potential to paint an anonymous picture of that user.
This is nothing new -- publishers have been capturing data to use for their own on-site personalisation and advertising optimisation for years. The challenge, however, is that any one publisher is never going to be big enough to gather enough data or command enough negotiating power to disrupt the dominance and scale of a Facebook or Google.
This is where second-party data cooperatives give publishers the chance to level the playing field. Beyond generating revenues via direct and programmatic advertising strategies, publishers that contribute to data cooperatives have the potential to earn incremental revenues for the intent signals generated by their audiences interacting with content. And here is where it gets exciting: it isn’t just revenue that cooperatives can give publishers. They can also give access to the data for the publisher’s own use too. And this is how David can beat Goliath!
The reason Facebook and Google’s advertising solutions are so powerful is because their scale gives them access to more data, making their predictive algorithms more powerful and accurate. The bigger they get, the better they get, which becomes perpetually self-fulfilling. They command such a great share of advertisers' budgets that it leaves increasingly little to spread out to other publishers, particularly when their performance can’t rival the prowess of the behemoths.
Where data co-operatives help is in aggregating the intent signals from many publishers so that predictive algorithms can be developed that rival the scale of the giants. If advertisers can deliver comparably higher-performing campaigns through the use of publisher cooperative data, more budgets will be allocated to this inventory, which will in turn flow through to publishers.
Data cooperatives have an added benefit to publishers, in that they make the audience data available to them via their DMPs or programmatic buying platforms. Suddenly, even a small publisher that is a fraction of the size of Facebook is able to target ads as effectively as them, at no additional cost. Alternatively, the cooperatives are able to give publishers deep insights into the shopping behaviour of their audiences, which they can then bundle up with inventory to create compelling, unique, contextual direct advertising opportunities to advertisers.
And this makes me confident that there is a strong and exciting future for independent content creators that is not entirely dependent on the fortunes of a few large players. Where scale can be achieved through publishers cooperating and sharing in a way that only augments what they have, we end up with a more diversified, rich Internet of well-remunerated content creators. Isn’t that the kind of world we want to be in?